BANKRUPT STOREKEEPER

Pahiatua Herald, Volume XIX, Issue 4945, 19 September 1914, Page 4

BANKRUPT STOREKEEPER

I BOOKKEEPING CRITICISED. “AN EXTRAORDINARY WAY.” | J. S. McNICOL S ESTATE. A meeting of creditor.-, in the estate of John Steel McNicol, bankrupt, who has been carrying on the Post Office Store at Mangamutu ('Pahiatua), was held at the office of the Deputy-Official Assignee (Mr J. D. Wilson), yesterday afternoon. The following creditors attended or were representedG. G. Taylor (Ballance Dairy Company); J. G. Brechin, A. Larsen, L. Feist, E. Darley (Pahiatua “Herald”), W. E. Collins (Abraham and Williams), A. Cleghorn, C. Holda.way, J. Stanton, Hartstone (Woodville Bacon Company)* P. J. McCarthy, Press (Thompson Bros). Bankrupt and his solicitor (Mr J. O.sburne-Lilly) were also present. Mr G. Harold Smith appeared on behalf of the Assignee. The total amount owing to unsecured creditors the Assignee stated was £IOBS, and the assets £1256, leaving a surplus of £l7O 9s Id. There was one secured creditor for £IOO. Bankrupt, in a written statement, stated that his bankrupev had been caused bj- the whole of liis capital becoming locked up in book debts, stock and plant. Fp to the time of the fire occurring at his store at Mangamutu, on April 2, 1914. he was going along all right. The fire destroyed the whole of his stick except about £IOO worth. He valued his stock at the time of the fire at about £BOO. He was insured for £6OO, and received £558. The insurance was held by Barraud and Abraham, Ltd. (Palmerston North), a., he owed them about £424 (£l7O of which was not due in the ordinary course of business until July) they deducted the full £424 from the £558. This left him with only £134 to stock upon, and in addition the firm stopped his credit. He estimated he lost about £250 by the fire, in addition to being deprived of business accommodation by the merchants during the worst months of the year so far as cash from cus-

tomers was concerned. This direct loss of cash and accommodation, together with the inability of his being able to collect his debts in the winter months and -everal of his creditors pressing caused him to file. The Assignee said he had put a man in charge of the store immediately after the bankruptcy. He did not think the book debts would realise the estimate of the bankrupt (£694), and had reduced the amount by £IOO. Bankrupt had some young heifers just on calving. He would have to act on the advice of his solicitor respecting some securities. Examined, bankrupt stated that the assets were under-estimated, if anything. He had handed the Assignee all his books and papers. He kept his own books, but he never took out periodical balance-sheets, although he took stock sometimes, but never kept a copy. He banked all his cash, and only took living expenses out of the business. Tile Assignee remarked that there was nothing to show that a proper cash book had been kept. A memorandum book produced only contained items relating to freights paid. Bankrupt said his wife kept a record in her house-hook of any cash or goods taken out of the business. The ledger contained items of cash he received in the shop and paid into the bank. Sometimes he p&id railway freights and wages in cash or by cheque. Mr Hammond (of the Commercial Insurance Co.) and witness worked out at the time of the fire the account paid on railway freights, and the sum was £l6B for the twelve months. He kept certain books of accounts prior to the lire, hut they were destroyed. In reply to Mr Press, bankrupt said that when he opened an account with Thompson Bros, he did not remember stating he did not ewe any old merchants’ accounts. He recollected making a statement to the etfect that he was solvent and could l»y 30s in the £ and his debts to merchants on due date, because at that time he fully anticipated £3OO being paid into the business bv his brother. The latter, however, found afterwards he was unable to do so. If the £3OO had gone into the business he would have been able to pay Air Hughes off his £IOO and to have transferred his interest in his section ou Mangatainoka Block to Thompson Bros. He did not tell the hitter linn at that time that Air Hughe** had, in conjunction with his bill of sale, a prior agreement respecting the section. Mr Press alleged that bankrupt hud therefore obtained goods from his firm under what appeared to lie false pretences. He also

questioned bankrupt concerning certain cheques paid out to local firms. McNicol explained that the cheques had been issued two months previously and the arrangement for payment | of same. Subsequently, Air 'Press | said that at first blush it looked as I if there had been preferential pay- | monte, but after hearing bankrupt’s explanation that did not seem so. He remarked that bankrupt had a verv convenient memory. Bankrupt said he nearly always paid wages bv cash. Mr Press said that there was no clour concise statement of (ash received. In reply to Mr Press, bankrupt said there was no book which he had not put in. Air Press remarkid that it was a loose wav of keet--mg books. The Assignee also said that it was an extraordinary way of keeping books. Bankrupt admitted that on July U)l h lie never disclosed to Thompson rm'fc. that ho had a-n overdraft or a guarantor. The Assignee explained that AfcNicol. while owing a considerable 1 sum to Thompson Bros, had made certain representations to the firm "I’d obtained more goods for a large amount. The firm now naturally felt sore. Further questioned hv Air Press bankrupt said that his* brother exisx'tixl to sell n property for £8(X1 and intended to give him £3OO out of it, I rrr, ss: Very generous brother. Air Tally; A\ e do find them oceasionally. : Bankrupt gave particulars of a po- | tato transaction lie had token into account by mistake when he prepared n statement of his position on August 15th for Thompson Bros. Ho

1 had offered the latter all he had in : J l**der :o get accommodation for reply to Mr Lilly, bankrupt said that when he made out a statement of his position, he put his I stock at valuation, and the plant and f book debts. These items he regard- \ & ed as. his assets. He showed all his / liabilities other than the security to Mr Hughes, because he had not included the latter in his assets. As [there was a surplus of assets, he considered he was solvent. With regard to Mr Hughes’ bill-of-sale, Mr Smith suggested that the best way out of the difficulty would be to pay Mr Hughes the £IOO. Mr (Press said he wanted to see money Coming in before any was paid out. The Assignee’s action in making an allowance of £2 to bankrupt was approved. Mr Press proposed that bankrupt be allowed 30s a week for three weeks, but at the suggestion of Mr Darley the amoupt was fixed at £2 per week, t vW&s proposed by Mr Press, sec>by Mr Collins and carried, .unr Jne Assignee realise on the heifers at the earliest opportunity, and to realise on the whole of the estate as early as possible. On the motion of Air Press, secondel by Air Brechin, it was resolved that provided the furniture comes into the hands of the Assignee, after satisfying Air J. Hughes, out of his securities, furniture to the value of \ £SO he given back to the bankrupt’s \'i wife, exclusive of the piano.